The Federal Trade Commission (FTC) issued a ruling on April 23, 2024, to ban noncompetes nationwide. Business groups, including the U.S. Chamber of Commerce, have already filed lawsuits to block the ruling. Set to go into effect in 120 days, plaintiffs are asking for a preliminary injunction that would prohibit the FTC from enforcing the rule while the case is being litigated. More lawsuits are expected.
Background
Read our initial overview of the FTC’s proposal from early 2023. The Biden administration issued an executive order regarding noncompetes in 2021.
Recent Announcement
Press release from April 23, 2024: FTC Announces Rule Banning Noncompetes
News coverage
Associated Press: New federal rule would bar ‘noncompete’ agreements for most employees | How US changes to ‘noncompete’ agreements and overtime pay could affect workers
Reuters: US Chamber of Commerce sues FTC for ban on noncompete agreements
CNN: FTC is sued by business groups over its ban on noncompete agreements, which may delay enforcement
Wall Street Journal: Business Groups Race to Block FTC’s Ban on Noncompete Agreements
Looking Ahead
We expect there to be further litigation that will impact the immediate enforcement of a ban on noncompetes in all states. For questions about how this may impact your business, contact us to speak with one of our attorneys.
